Is a ‘Bad Individual’ more Condemnable than Several ‘Bad Individuals’? Examining the Scope-severity Paradox
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Gilles Grolleau
Abstract
Previous literature found empirical evidence to the scope-severity paradox (SSP), corresponding to situations where the perceived harm of a wrongdoing or crime decreases with the number of victims. We examine this phenomenon for the perpetrators’ side. Using a survey experiment, we examine whether increasing the number of perpetrators of a crime, namely a fraud, decreases its perceived severity (and subsequent punishment) at the individual level. Two scenarios are examined corresponding to two kinds of fraud: a fraud committed by a financial adviser against his/her own employer (scenario 1) and a tax evasion by an executive (scenario 2). Overall, our results do not offer a clear-cut support for the scope-severity paradox for the perpetrators’ side, even if some secondary results can be indicative of a possible SSP in some circumstances. More precisely, in the case of a financial fraud, the stated severity increases when the number of perpetrators is low. We discuss the implications of our results and raise important issues for future research.
Acknowlegments
The authors are very grateful to Jean-Marc Rousselle for research assistance. They are also grateful to Nives Della Valle and Alain Marciano for their useful comments and suggestions. They also thank the editor, Pr. Christoph Engel, and two anonymous reviewers for their valuable feedback that helped them to substantially improve the experimental design used in the manuscript. Finally, they acknowledge the financial support by the French National Research Agency (GREENGO Project, ANR15-CE05-0008-01).
Appendix 1: Scenarios used in the survey instrument [adapted from Nordgren and McDonnell (2011) and translated from French]
The scenarios described above are hypothetical and independent. Please, read them carefully and answer the questions. There is no good or wrong answer. Only your sincere viewpoint matters.
Scenario 1:
[Treatments T1, T2 and T30]
Thanks to a sophisticated illegal system, a [2/30] financial advisor[s] [in 2/30 different companies] managed to divert 300K€ [each 300K€] to his [their] personal advantage. This total of 300K€ [600K€/9000K€] represents a dry loss for his/her [their] employer[s]. Investigations have clearly shown that this [these] financial advisor[s] is [are similarly] responsible for this [these] misappropriation[s].
[Treatments T1* and T2*]
Thanks to a sophisticated illegal system, a [2] financial advisor[s] [in 2 different companies] managed to divert 9000K€ [each 4500K€] to his [their] personal advantage. This total of 9000K€ represents a dry loss for his/her [their] employer[s]. Investigations have clearly shown that this [these] financial advisor[s] is [are similarly] responsible for this [these] misappropriation[s].
Please indicate how you judge the severity of the act committed by this [each of these] financial advisor[s] [knowing that they made their decisions independently and without arrangement] on the scale below:
| 1 Not all severe | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 Extremely severe |
Suppose that this type of behavior can result in a fine of up to 5 times the amount of the fraud for each convicted individual. According to you, how much this [each of these] advisor[s] should pay? _________ times the amount of the fraud (between 0 and 5).
Regarding your answers to the two previous questions about the act committed by this [each of these] financial advisor[s] and the fine, please indicate the level of importance of the following reasons:
| Reasons | Not important | Very important | |||||
| The employer has been deceived and wronged (regardless of the respect of regulations) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
| The individual[s] violated a law (regardless of the impact on employer[s]) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
| The committed fraud is unacceptable | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
Scenario 2:
[Treatments T1, T2 and T30]
An [2/30] entrepreneur[s] made [each] false declarations to the financial and stock exchange authorities, which allowed him/her [them] to gain illegally 10M€ [10M€ each] over 10 years. This total of 10M€ [20M€/300M€] should have been paid to the tax department if he/she [they] had honestly declared all his/her [their] income to the authorities.
[Treatments T1* and T2*]
An [2] entrepreneur[s] made [each] false declarations to the financial and stock exchange authorities, which allowed him/her [them] to gain illegally 300M€ [150M€ each] over 10 years. This total of 300M€ should have been paid to the tax department if he/she [they] had honestly declared all his/her [their] income to the authorities.
Please indicate how you judge the severity of the act committed by this [each of these] entrepreneur[s] [knowing that they made their decisions independently and without arrangement] on the scale below:
| 1 Not all severe | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 Extremely severe |
Suppose that guilt for this type of behavior can result in condemnation of up to 10 years in jail for each convicted individual. According to you, how many years in jail this [each of these] entrepreneur[s] should be condemned to? _________ years (between 0 and 10).
Regarding your answers to the two previous questions about the act committed by this [each of these] entrepreneur[s] and the condemnation, please indicate the level of importance of the following reasons:
| Reasons | Not important | Very important | |||||
| The authorities have been deceived and wronged (regardless of the respect of regulations) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
| The individual[s] violated a law (regardless of the unpaid amount of money) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
| The committed fraud is unacceptable | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
Please, indicate the following information:
| 1. Age:__ years | 2. Gender: Male □ Female □ | 3. Education: (French) Bac + ___years. Less than Bac □ |
| 4. Status: Professional □ Student □ Other (Please, precise)_____________________ □ | ||
| 5. Your net income/month (€): < 500€ □ Between 500€ and 1000€ □ Between 1001€ and 1500€ □> 1500€ □ | ||
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Articles in the same Issue
- Articles
- Two Advantages of the Negligence Rule Over Strict Liability when the Parties are Risk Averse
- Is a ‘Bad Individual’ more Condemnable than Several ‘Bad Individuals’? Examining the Scope-severity Paradox
- Leniency Programs and Cartel Organization of Multiproduct Firms
- Fairness Vs. Economic Efficiency: Lessons from an Interdisciplinary Analysis of Talmudic Bankruptcy Law
- Individual or Enterprise Liability? The Roles of Sanctions and Liability Under Contractible and Non-contractible Safety Efforts
- US State Tort Liability Reform and Entrepreneurship
Articles in the same Issue
- Articles
- Two Advantages of the Negligence Rule Over Strict Liability when the Parties are Risk Averse
- Is a ‘Bad Individual’ more Condemnable than Several ‘Bad Individuals’? Examining the Scope-severity Paradox
- Leniency Programs and Cartel Organization of Multiproduct Firms
- Fairness Vs. Economic Efficiency: Lessons from an Interdisciplinary Analysis of Talmudic Bankruptcy Law
- Individual or Enterprise Liability? The Roles of Sanctions and Liability Under Contractible and Non-contractible Safety Efforts
- US State Tort Liability Reform and Entrepreneurship
